Tensions Surface Early at FTC Spam Forum

WASHINGTON -- The good news is that DMA president/CEO H. Robert Wientzen was booed only once at yesterday's spam forum sponsored by the Federal Trade Commission.

The bad news is he was the only one booed.

Old tensions surfaced quickly during the first panel as the eight participants and moderator defined what they perceive as the problem with spam. At one point, in an effort to illustrate that e-mail is an important economic driver, Wientzen cited a recent Direct Marketing Association study saying 36 percent of respondents said they had made purchases through e-mail.

"That's not insignificant," he said.

However, other panelists said a significant percentage of the purchases probably were made from solicited commercial e-mail rather than spam.

"No one here wants to stop solicited commercial e-mail," said panelist Laura Atkins, president of the nonprofit anti-spam group SpamCon Foundation.

"There would be no way to have solicited e-mail if there wasn't some way to approach these people," Wientzen replied, implying that prospecting via unsolicited e-mail is a crucial part of e-mail marketing.

The comment was met with an immediate and loud chorus of boos and hisses. The room of 400 business representatives, consumer advocates and government representatives -- at least the most vocal faction -- was decidedly anti-spam and not overly direct marketing friendly.

"The DMA is not serving its members" by advocating opt-out e-mail marketing, panelist Clifton Royston said in response to Wientzen's remark, adding that spam is making it too difficult to distinguish wanted e-mail offers from unwanted offers.

When privacy advocate Jason Catlett asked panelists from the audience whether they favored opt-out or opt-in e-mail marketing, Wientzen was one of only two in favor of opt-out e-mail marketing, or marketing where the sender can approach the receiver until the receiver opts out.

Meanwhile, panelists offered evidence that spam is growing worse far faster than most predicted. America Online recently blocked 2.37 billion pieces of spam in one day, said Joe Barrett, senior vice president of systems operations at AOL. If the spams were letters and someone laid them end to end, they would wrap around the Earth four times and then go to the Moon, he said.

Growing discontent over spam is causing states and Congress to look at stronger measures against it. On Tuesday, Virginia jumped into the battle, as Gov. Mark Warner signed into law two bills that establish the toughest state rules yet. The state already had an anti-spam statute, but the new law goes further by letting the state seize spammers' assets if they are convicted of sending misleading e-mail.

Those found guilty of sending more than 10,000 such deceptive e-mail messages in one day would be subject to a prison sentence of one to five years. The law also would outlaw practices like forging the return address line of an e-mail message.

Virginia is home to America Online and several other major Internet providers.

Royston, who is systems architect at LavaNet Inc., said the ISP has seen a fourfold increase in spam this year and is experiencing a 50 percent rise monthly. And that increase is after the ISP uses blacklists to filter spam, he said.

However, Wientzen said, 90 percent of the spam problem is caused by relatively few bulk e-mailers -- he estimated 200 -- and identifying them and "vigorous enforcement of existing law" would go a long way toward solving the problem.

"You always say the problems are caused by the fraudulent few," said moderator Eileen Harrington, associate director in the marketing practices division at the FTC. "How do you back that up?"

Wientzen said he got the figure from the Justice Department and the FBI.

"Let's go after those people who we can get," he said. "For a country that can conduct the kind of operation we just conducted, to not be able to deal with Nigerian e-mail is ridiculous."

Washington attorney general Christine Gregoire disagreed.

"It's not just a few, and [fighting spam] is extremely difficult," she said. "We've got a significant problem on our hands."

Though Wientzen advocated enforcing existing law, he said the DMA supports the Burns-Wyden CAN-SPAM Act, which was reintroduced into the Senate last month. Though the DMA came out in favor of federal anti-spam legislation last fall, this is apparently the first time it has said that it backs a specific bill.

Most of the other panelists said they don't support the CAN-SPAM Act because it would be too weak and would supersede stronger state laws.

Gregoire said it would be too easy for spammers to defend themselves against the CAN-SPAM Act. For example, she said, if someone tries to opt out, but the mailer's opt-out box is full, the marketer could use the overflowing inbox as a defense.

"Well, I'm sorry, my mailbox is full of their spam, and it's not a defense," said Gregoire, to which the room erupted in applause.

Meanwhile, Wientzen said the DMA is working on a so-called gold list of members who meet certain best-practices standards that could be forwarded to ISPs so they could more easily recognize mail from these sources and let it pass their filters.

However, "it could be said that best practices are just fiddling while Rome is burning," Harrington said.

In other news, FTC chairman Timothy Muris said the commission will announce the first spam settlement in which the e-mailer is banned from sending spam. To date, the FTC has announced 48 spam-related enforcement actions related to fraud.

Also coinciding with the FTC workshop, the DMA announced its position against the practice of automatic algorithmic e-mail addressing, also known as dictionary attacks, that spammers use in mass untargeted marketing campaigns or to ascertain live addresses.

The DMA also said commercial messages should not be sent when e-mail addresses have been captured surreptitiously -- a practice often called harvesting. Both practices constitute abuses of the right to send e-mail legitimately, the DMA said, and could undercut e-mail as a business communications tool.